Annual Report 2021

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Creating tomorrow’s solutions

Financial-Management Principles and Goals

Our key financial-management goal is to secure WACKER’s financial strength over the long term. The central task is to sufficiently cover the financial needs of our operations and investment projects. Financial management at WACKER comprises capital structure management, cash and liquidity management, and the management of market-price risk (currencies and interest rates). Capital structure management involves shaping the capital structure of the Group and its subsidiaries.

In liquidity management, WACKER continuously monitors cash flows from operations and from financial transactions. WACKER covers the resulting liquidity needs via suitable instruments such as intra-Group lending, or through external loans from local banks.

WACKER pursues a careful financing policy that targets a balanced financing portfolio, a diversified maturity portfolio and a comfortable liquidity buffer.

WACKER’s key source of liquidity is the operations of its Group companies and the resulting incoming payments. This centralized system of internal transfers reduces our interest expense and the need for debt financing. The purpose of managing market-price risks is to limit the effects of fluctuations in exchange rates and interest rates on the Group’s bottom line.

New Financing Measures in 2021

WACKER took out several long-term loans in the prior year to secure financial planning for the long term. The loans have maturities of four to six years. Some of the loans were drawn down in 2021, while some will be disbursed in 2022. In December 2021, an expired syndicated loan in the amount of €200 million was replaced by a new syndicated loan agreement for the same amount. The new loan serves as a line of credit and matures in 2026.

Financial Analysis

The Group’s cash flow is a key instrument of liquidity management. Net cash flow serves as the internal indicator for measuring the liquidity of operating activities.

Net Cash Flow
Net cash flow is defined as the sum of cash flow from operating activities and cash flow from long-term investing activities (excluding securities).